It is better to create a plant-based meat product, not only because of meat expiration issues, but bacterial issues with animals, mad cow disease, and so many other factors that clearly make eating plants natural to humans and such a better option. Dow Jones Reprints at 1-800-843-0008 or visit Extensive background in CPG . Still, it's clear that Brown's idea has caught on: The 10-year old company went public earlier this month at a $1.5 billion valuation. With the high expectations of consumers and the competition they were about to create, knowing that they got in during the right time when consumers would take it as a positive and embrace this new way to eating meat, or meat substitute.. The main difference is that Impossible Foods takes its proteins from soy whereas Beyond Meat extracts it from peas. News Corp is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. Should Kellogg continue to push the marketing of Incogmeato and swiftly gain customers, investors may kiss the ultra-high expectations baked into BYND goodbye. Beyond Meat just IPOd last year, it is very interesting to me to see that it is a 9.30B company as of today. The first six months of 2020 have visibly transformed Beyond Meat 's ( BYND -0.58%) approach to marketing its plant-based, meat substitute products. This article will take a deep dive into Beyond Meats journey to success and provide some tips other brands can use to fuel their own growth stories. Figure 11 shows the implied values for Beyond Meat assuming Kraft Heinz wants to achieve an ROIC on the acquisition that equals 6%. our Subscriber Agreement and by copyright law. To fight this incorrect belief, Ethan Brown launched a campaign featuring famous athletes. Entrepreneur, retail expert, strategy consultant and author. Problem Recognition- Consumers did not know about the conditions of the animals that are actively being slaughtered to create meat. Beyond Meats successes have inspired the giants to create new categories. Success of any of Beyond Meats competitors could also further threaten future profit growth for Beyond Meat. Beyond Meats real breakthrough is not landing in the meat aisle or having celebrity endorsements but creating a plant based product people actually want to eat. What are your predictions for the future of this company? While I chose Kraft Heinz, analysts can use just about any company to do the same analysis. Figure 2: Beyond Meats Profitability vs. Its difficult to imagine the product or service that got your brand on the map might not be the one that helps you achieve further growth. Plants come directly from the sun and reap the energy created from the sun. 8 Facts About Pelotons Marketing Strategy You Need to Know, Dirty Lemons Marketing & Growth Strategy, How it Became a Success, Crocs Marketing Strategy. Create a great product. However, some investors have growing concerns about the companys ability to maintain these results. Even with that success, Brown continues to think big . Jurgens brings over 20 years of experience with a proven record of growing sales and profit through strategy, branding, marketing, operational excellence and innovative approaches. Why? *Average returns of all recommendations since inception. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Heres a high-quality portfolio to beat the market, with over 100% return since 2016, versus 55% for the S&P 500. We're here to help brands make better marketing decisions by delivering world-class, scalable insights. Of course, this is wrong, and our body adapts to whatever we give it. Heres a quick summary for noise traders when analyzing BYND: Executive Compensation Adds Additional Risk. Low margins in an increasingly competitive industry leave Beyond Meat with less flexibility to compete on price or invest in marketing and R&D. The following table, covering Q2 2020, shows how drastically this dynamic has changed, as management has leaned into winning customers at the grocery shelf during a near-cessation in dining-out activities: Beyond Meat is now incentivizing potential retail customers to try its products via a limited-time offering it dubs the "Cookout Classic" burger value pack. We believe there's a better way to feed our future. Beyond Meat, Inc. (NASDAQ: BYND) is one of the fastest growing publicly-traded food companies in the United States, offering a portfolio of revolutionary plant-based proteins made from simple ingredients without GMOs, bioengineered ingredients, hormones, antibiotics or cholesterol. Clearly, vegan meat alternatives were no longer a fad. Our marketing speaks very much to the ability for the highest-performing people in our society to perform not just as good, but better as result of the consumption of plant-based meat, particularly, our plant-based meat.. Previously, people were limited to information they see on television which is in the best interests of companies that can afford those ad campaigns. Acquisitions completed at these prices would be truly accretive to Kraft Heinzs shareholders. A vegan burger that bleeds. It looks like meat, tastes like meat, and even feels like meatbut its made entirely of plants. First, consumers expectations for new products and innovation will rise over time. But for a young organization that wants to leapfrog rivals in gaining plant-based mindshare, the shift isn't illogical, and it may result in a durable competitive advantage. Is It Time to Buy? Without significant increases over the margins and revenue growth assumed in this scenario, an acquisition of Beyond Meat at its current price destroys significant shareholder value. Read the full post on my retail trends blog by clicking here. Even more impressive is that Beyond Meat is, well, a food company (it develops plant-based meat products) and the sales for 2018 were only $87.9 million (and yes, the company has yet to post a . What is Beyond Meats marketing strategy? Our goal is to give you the key to understanding Beyond Meats rapid success, to show you the hidden reasons for their success. I believe this drive will continue and not stop. Beyond Meat had originally been sold in retail shops across the USA, then worldwide. This new knowledge of healthy vs. unhealthy created a new market drive for healthy products. Beyond is working to streamline its operations and reverse declining sales. DOI: 10.2991/assehr.k.211209.003. Full Year 2020 Financial Highlights1. Catalyst: Others Success Could Come at Beyond Meats Expense. And while there are a few ways to do this, brand monitoring software is your best bet, as it allows you to track your chosen brand KPIs for the target audiences that matter. Also, these meat products are offered by themselves at the grocery stores. And the organization continues to spill a slight amount of red ink, generating a loss of $10.2 million over the last three months versus a loss of $9.4 million in the second quarter of 2019. Information Search- Consumers using this new information to do their own research on the history of slaughter houses and the conditions in which animals are being tortured and killed to create meat. Investors should note that maximizing customer acquisition through the retail channel will probably crimp the company's admirable growth rate, as future promotions and new iterations of discounted value packs will reduce the amount of recorded sales (net revenue), as we've discussed above. Figure 8: Current Valuation Implies Massive Revenue Growth, Significant Downside in a More Realistic Scenario. It began trading at $25/share on the Nasdaq stock exchange and ended the day at $65.75. Beyond Meat entered into a partnership with PepsiCo. The first six months of 2020 have visibly transformed Beyond Meat's(BYND 5.83%) approach to marketing its plant-based, meat substitute products. Eat What You Love Competition- Beyond Meat has created competition by completing innovating meat and how meat is viewed. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. According to the Partners In Leadership Happiness at Work survey, when employees are happier at work, 85% take more initiative. The number of shares sold short has increased by 10% since last month. If Beyond Meat created the healthiest plant based products that dont taste very good then it wouldnt be in business very long. The California-based company is orienting its retail business around Kroger Co., Walmart Inc., Publix Super Markets Inc., Costco Wholesale Corp. and Whole Foods Market, according to internal company presentations and documents. Then, followed by J.J. Redick, Maya Moore, April Ross, Eric Bledsoe, Maggie Vessey, and Tia Blanco. With these headwinds Beyond Meat had to convince meat lovers that its products passed the test. By Tricia McKinnon. This is not by accident but instead by design. Beyond Meat might be the pioneer in this segment, but now it faces fierce competition. To illustrate, the company repackaged a portion of its slow-moving food service inventory for retail consumption. Considering these competitors are already supplying plant-based protein products, Beyond Meat faces an increasingly uphill battle to reach the size it needs to match the cost efficiencies of larger competitors like these two established firms. This copy is for your personal, non-commercial use only. Plant-based burgers have existed for decades before Beyond Meat. strategy uncovers and shares the "bold vision, . With a market cap of over $9.6 billion, the stock now trades a little over 17x projected 2021 revenues, despite the fact that 2020 was the toughest year for the company due to the pandemic and it also missed analysts expectations for Q1 2021. There are currently 7 million shares sold short, which equates to 9% of shares outstanding and just over one day to cover. Engineered plant-based burger patties from food, company Beyond Meat are visible on shelves among other meat alternatives at a grocery store in San Ramon, California, August 28, 2019. After all, the positive choices we make every day - no matter how small - can have a great impact on our world. And by 2020, Beyond Meat had launched an e-commerce site that served as a direct-to-consumers portal, allowing customers to purchase their products individually. This would, in turn, take BYNDs market cap to about $14 billion by 2023, from $9.6 billion currently. As of December 31, 2020, Beyond Meat had products available at approximately 122,000 retail and foodservice outlets in over 80 countries worldwide. As Kroger invests further in its Simple Truth brand, wed expect the firm to allocate more shelf space to its own in-house brands, rather than a competitor such as Beyond Meat. What can you learn from this? Additionally, the companys new partnerships will also drive impressive top line growth. However, Kelloggs appears it is ready to launch Incogmeato and recently partnered with Postmates to deliver free Incogmeato samples to residents of Denver and Dallas. In any case, I view recent moves as encouraging as Beyond makes moves to improve its footing to grow as a . Beyond Meat would rather investors focus onflawed non-GAAP metricssuch as adjusted EBITDA, which allow management to remove real costs of the business and to paint a rosier view of profits. Plant-based meats look like an attractive bet to play the future of food. If you are wondering how Beyond Meat has been able to make strides where others havent consider these four elements of its marketing strategy. Its worth noting that any deal that only achieves a 4.4% ROIC would not be accretive to shareholder value, as the return on the deal would equal Kraft Heinzs WACC. The larger the firm gets, the more difficult it becomes to achieve large year-over-year (YoY) growth rates. While Tyson Foods posted almost 5% margin in FY2020 (ending 3rd Oct, 2020), the company is a dominant force in the market with its size being significantly larger in comparison, which makes it probably unreasonable to expect similar margins for Beyond Meat, which has still not made any profits. + Follow. They entered the restaurant market, and are currently sold to plant-based and mainstream restaurants. The future is one where the meat case is going to be called the protein case and consumers will be able to buy plant-based and animal-based protein side by side,saidEthan Brown, founder and CEO of Beyond Meat. When Beyond Meat was met with the failure of their Chicken-Free Strips their first real product they didnt fold. About 70% of the global population is cutting down its meat consumption. (Photo Illustration by Drew Angerer/Getty Images). As the industry becomes more commoditized, economies of scale will be even more important for firms seeking profitability, which doesnt bode well for smaller firms such as Beyond Meat. The Motley Fool owns shares of and recommends Beyond Meat, Inc. This competitive disadvantage only makes Beyond Meats path to sustainable profitability that much more difficult. Now, lets proudly assume what they are: a plant-based burger, extracting plant proteins to make a tasty and healthy burger. They have sharply improved from -93.3% in 2016 to -4.2% in 2019. Furthermore, Don Lee alleged significant concerns about food safety protocols concerning the raw materials that Beyond Meat sent. February 1, 2022 . Beyond Meat Inc. BYND, -7.36% is revamping its retail sales strategy to center on five major grocers and hiring a new marketing executive as part of an effort to reinvigorate the plant-based food . It doesnt matter what industry your brand is in theres always a chance consumers wont take to your product or service. Figure 7 compares the firms implied future NOPAT in this scenario to its historical NOPAT. You can find Beyond Meat in many places from small restaurants to national chains but what really accelerated its growth in the beginning was its partnership with Whole Foods. Placing its hamburgers and breakfast proteins in major quick-service restaurant chains was a logical approach to igniting brand awareness. Plant based burgers are not new but Beyond Meat has been able to capture more of the . There have been many stories of grocery story employees getting told by their bosses to take the expired meat and mix it with regular meat and put it back out there on the shelf.